To Prevent Family Squabbles, Add Two Documents to Estate Planning To-Do Lists

When a man who had remarried passed away, his children were less upset about his leaving everything to their stepmother than they were about her decision to liquidate the family home and furnishings. Rather than give the children an opportunity to enjoy things that had special meaning to them, she took the position that they could come to the auction and bid on the items, just like anyone else who attended the auction. The heartbreak and hard feelings that resulted could have been prevented with the use of two documents: a Letter of Instruction and a Personal Property Memorandum.

While it seems that listing out personal assets like jewelry, books, photo albums and home furnishings might be tedious and not really necessary, a recent article in Forbes, “Simple Steps To Prevent Future Family Inheritance Rifts,” points the way to using two documents that can ensure that your personal property goes where you want it to go, and also saves your heirs from losing personal items that may hold a great deal of meaning to them.

A Personal Property Memorandum is a legally binding document. It is to be referred to in the will and lists all the personal property you want to leave to your heirs and loved ones. A personal property memorandum is recognized in 30 states and must be referred to in the will, but the document doesn’t need to be notarized or witnessed. The article suggests that you clearly describe these items so they aren’t confused with others. For example, “All of the Barry Manilow LPs in my collection are to go to Cousin Buddy.” Make sure your executor has the correct information as well; you don’t want the wrong relative to walk off with your disco records!

The second document is called a Letter of Instruction. This is a non-legally binding document that you can create to convey any specific wishes. You may not be able to create a legally binding document to bequeath personal property, so this letter can be a terrific tool to detail the disposal of these things. Here are the types of items that you may want to include in a Letter of Instruction that might not be contained in a Personal Property Memorandum. The article says to think of a Letter of Instruction as a “cheat sheet” to estates. It might contain the following:

  • The location of important legal documents;
  • All pertinent contacts for legal, tax and financial information and advice;
  • Any prepaid funeral arrangements;
  • Burial or cremation wishes; including hymns or speakers you’d like at your memorial;
  • A list of financial assets with the beneficiaries and account numbers, PINs, usernames and passwords where applicable;
  • The location of your latest tax return and Social Security statements;
  • Safe deposit box locations and keys; and
  • A list of instructions regarding insurance proceeds, trust provision explanations, and business succession plan notes.

The article also suggests that you leave a list of contact information for people who should be notified of your passing.

Personal Property Memorandums and Letters of Instruction can be pretty easy to create and to change. They can be a big help to your loved ones after you pass away.

Reference: Forbes (July 17, 2015) “Simple Steps to Prevent Future Family Inheritance Rifts”